Registered Retirement Income Fund (RRIF) FAQWhen is the best time to open an RRIF? This is an individual decision and is dependent on your current and retirement income needs. You can transfer funds from your Registered Retirement Savings Plan (RRSP) into an RRIF at any age, but you must convert all your RRSP funds no later than December 31 of the year in which you turn 71. How do I calculate RRIF payments? With a RRIF, you decide how much money you want to receive as income, subject to a legislated minimum income payment. Your annual minimum payment is based on your age on January 1, and is calculated as a percentage of your RRIF value at the beginning of each year. Are taxes withheld when I withdraw from my RRIF? If you wish to make a lump sum withdrawal from your RRIF that exceeds your minimum payment, tax will be withheld. This amount is calculated according to the following table:
What is the Pension Income Tax Credit? All RRIF withdrawals are subject to income tax in the year in which they are received. The only exception is the first $2,000, which is eligible for the Pension Tax Credit if you are 65 or over. What happens to my RRIF in the event of my death? In the event of your death, your RRIF will be distributed to your designated beneficiary. If you designate your spouse as the beneficiary of your RRIF, your spouse can continue to receive payments from your existing RRIF or transfer it to his or her own RRIF. If the proceeds are paid to any other beneficiary, the amount remaining in your RRIF will be added to your taxable income in the year of your death. You may also defer tax by leaving your RRIF to a dependent child. If you have more questions about RRIFs or other investment options, visit or call us at SASCU Wealth. |
